Ruling on wells helps boost 2018 impact fee collection

Jan 28, 2019, 1:37pm EST

This article reposted from the Pittsburgh Business Times

Marcellus Shale Gas Drilling Tower

The natural gas drilling impact fee is set to reach a record for 2018.

The Public Utility Commission’s pending collection of impact fees will be boosted this year by about $22.3 million by a state Supreme Court ruling over the status of a certain type of well that had been disputed by some natural gas drillers.

The recent ruling in the Snyder Bros. vs. Pennsylvania Public Utility Commission ruling adds so-called stripper wells to impact-fee collections. Stripper wells are oil and natural gas wells that are nearing the end of their operating life, and some drillers said they shouldn’t be counted for impact fees. That was settled earlier this month.

This contributed to what the Independent Fiscal Office estimates will be a new record for annual collections of $246.9 million for 2018 natural gas activity, up $37.4 million from 2017. Counties, municipalities and a housing fund will receive the most with $137.2 million, followed by $91.5 million for the Marcellus Legacy Fund, $10.5 million to state agencies and $7.7 million for conservation districts.

Beyond the contribution from delayed well payments, another $15.1 million was tied by the IFO from the 779 new wells spud in 2018.

“Pennsylvania’s tax on natural gas, the impact fee, is working as designed and an important revenue source for statewide environmental and conservation programs, as well as communities in all 67 counties,” said David Spigelmyer, president of the Marcellus Shale Coalition.

Revenues for the past five years from the impact fee:

2014: $223.5 million
2015: $187.7 million
2016: $173.2 million
2017: $209.5 million
2018: $246.97 million
Here’s the list of estimated payments by driller, according to the PUC earlier this month.

Paul J. Gough
Reporter
Pittsburgh Business Times